US: Moves underway to initiate safeguard on Honduran socks
The US government is preparing to take steps to impose a safeguard limit on sock imports from Honduras according to the US lawmaker who has campaigned for the action.
Congressman Robert Aderholt (R-Haleyville) says he has been told by US Commerce Secretary Carlos Gutierrez that the Committee for the Implementation of Textile Agreements (CITA) is to begin reviewing the sock trade data for Honduras for evidence that imports from the country are damaging the US industry.
While CITA stresses this process is just a preliminary move, it could eventually lead to the full implementation of a sock safeguard to protect the US sock industry from Honduran imports, which have surged since as a result of the DR-CAFTA Central America Free Trade Agreement in 2005.
Aderholt said in a statement: "Imports have been on the rise while domestic production has declined. A sock safeguard represents one way to ensure that our manufacturers are given an opportunity to adjust to new market conditions and compete on a level playing field."
According to US data, domestic sock production dropped by 19.6% in 2006. In the first quarter of 2007, domestic sock production dropped by another 13.5%. At the same time, sock imports from Honduras have increased almost 50% in the year ending in May 2007 to nearly 19m dozen pairs.
To put these figures into context, though, Honduras ships fewer socks to the US than China (nearly 60m dozen pairs), and Pakistan (nearly 45m dozen pairs).
However, the decision by companies like Canadian-based sock maker Gildan Activewear to take advantage of DR-CAFTA by building a second sock factory in Honduras with a capacity of 15m dozen pairs, are leading to fears that the country's exports will rise even further.
Before DR-CAFTA was signed, Gutierrez promised to initiate a sock safeguard if the situation were to warrant it.
Specifically, the trade agreement includes a special safeguard clause allowing the US to impose duties of between 11.3% and 18.8%, depending on the type of sock, for up to three years if imports cause or threaten to cause damage to the domestic industry.
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